AN INDEPENDENT report that is expected to approve Crossrail, the £10 billion proposed railway linking East and West London, has been delayed because of last-minute Treasury fears over the potential cost to the public purse.

Transport sources told The Times last night that the Treasury was troubled by proposals from Adrian Montague, the government troubleshooter, which would see it pay substantially more than £2 billion towards the infrastructure project. Observers say that Mr Montague’s feasibility study, which was thought to have come down firmly in favour of building the controversial and long-debated rail link, is being delayed by attempts to cut the amount of public funding for the project.

The Treasury’s position is that it is prepared to pay for Crossrail only in the same proportion that London contributes to the wider UK economy, thought to be about £2 billion. Economic benefits that will accrue to London itself must be paid for by the capital’s business community. But Greater London Authority sources say Mr Montague may have suggested that the Treasury should pay a larger contribution to the project, which is expected to generate £19 billion of benefits to the UK economy, according to a study carried out for Ken Livingstone, Mayor of London, who is a supporter of the scheme.

Mr Livingstone has argued that, with the rise in tax revenues likely to be more than £7 billion over 30 years, a contribution from the Government of “roughly half” of the project is not unreasonable. The Treasury’s transport team, including Lewis Atter and Shriti Vadera, a special adviser and expert on Public Private Partnership deals, is thought to have been closely involved in the prepartion of Mr Montague’s report.

One source familiar with the negotiations said Ms Vadera, a former director of Warburg Dillon Read and the Treasury’s top negotiator in PPPs, was “highly engaged in the Crossrail debate and a hawk”. She is understood to be troubled by the financial commitment the Montague report expects. Ms Vadera took a similarly hard line in negotiations with Bob Kiley, Mr Livingstone’s Transport Commissioner, over the London Underground PPP. At the time, she told Mr Kiley she “could not sanction public control of the Tube under any circumstances”.

Mr Montague’s report into Crossrail was due at the Department of Transport by the end of January. The department said yesterday that it expected it “imminently”.

Last night, at short notice, Alistair Darling, the Transport Secretary, cancelled a meeting with MPs who are interested in Crossrail.

Mr Darling has rearranged the meeting for the end of February, leading to suggestions that he is buying more time for his appointed adviser.

Mr Montague’s study was expected to say that there is a broad consensus among London businesses that they are prepared to pay a substantial contribution to the railway, as demanded by the Treasury.

That commitment could be as high as £2 billion, raised from business rate increases.